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January 27, 2006

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Doug Lichtman

Richard -

One response heard to arguments of this sort is a concern that a market-based solution (no matter how subtle) will discourage altruistic giving. The story, as I remember it, is that it becomes less attractive to give for altruistic reasons if the altruistic signal is ambiguous; you might, after all, be giving for the money. Do you know if there is any empirical evidence on this sort of question? That is, what happens to a set of interactions when we add "market forces" on top of what used to be a purely altruistic transaction?

ps. I should add that I am sympathetic to your cause here; I just would like to better understand the types of arguments that might be raised on the other side, and how well founded they are in real-world evidence.

slevmore

There is something of a collective action problem. I may direct my donation, figuring that if I need one I will take my place on a list (or be the beneficiary of a direction donation, if legal). But if we gave priority to well-intentioned donors, we might get many more donors, and then we might all be better off. This is the idea of Lifesharers and perhaps other donor "clubs;" the individual promises to donate but gives first priority to other members of the club. A separate question is whether we ought to do this regionally or nationally and perhaps even as a default rule. I am not sure whether the posted distaste for the current regulated scheme evinces an argument for private, directed donations - or for the club or priority approach.

Scott Scheule

Doug,

I recall a blogger at Crooked Timber writing about the topic, with evidence that in some situations altruistic giving can be discouraged by commodification. You might be able to find the post.

Lloyd Cohen

Richard,

I couldn't have said it better myself.

In response to Doug's question about the existence of remuneration reducing the amount of altruistic giving there are at least three formulations of this objection. The first and least problemmatic is the shifting of otherwise altruistic giving into the remuerated market. That result is merely a modest and arguably warranted wealth transfer.

The second is a discouragement of altruism by some individuals who do not accept compensation and instead drop out of the market. This can partially be dealt with by making explicit provision for donation of the compensation to charity in the program of organ acquisition.

The third is a notion that the decline caused by the second sort of problem could be so large as to swamp any increase in the provision by those encouraged by compensation. I know of no empirical evidence on the question--it is hard to imagine what it would be--but I offer the observation that it borders on the fantastic. Note as well that since the payment to the donor is a pure wealth transfer that it can be raised to virtually any level without a real economic cost. This may be a failure of my imagination but I can not conceive of a world in which the number of new people induced to provide a kidney at $1,000,000 a pop would not be greater than the current altruisitic donors who would drop out of the market if payment is offered.

Lloyd Cohen

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